Property Insurance
Property All Risk (PAR) Insurance
Property All Risk (PAR) Insurance is a comprehensive insurance policy that provides broad coverage for physical assets against a wide range of risks, including fire, theft, natural disasters, accidental damage, and more. Unlike named-peril policies (such as Standard Fire and Special Perils Insurance), PAR insurance covers all risks except those explicitly excluded in the policy wording.
This type of insurance is offered by several insurers, including ICICI Lombard, and is ideal for businesses and asset owners seeking extensive protection without having to list specific threats individually.
Why is Property All Risk (PAR) Insurance Essential?
- Comprehensive Coverage Beyond Fire & Special Perils
- Protection Against Unforeseen Damages
- Customizable for Different Property Types
- Eliminates the Gaps in Named-Peril Policies
- Business Continuity & Financial Security
- Covers High-Value Industrial & Commercial Properties
Important Things You Should Note
- Broad Coverage, But Exclusions Apply – PAR covers all risks except those explicitly mentioned as exclusions, so policy wording must be reviewed carefully.
- Can Cover Partial and Total Losses – Unlike some fire policies that may only compensate for total loss, PAR can also cover partial damage to assets.
- Premium Depends on Risk Factors – The cost is determined by property value, location, risk exposure, and past claims history.
- Can Be Extended with Add-Ons – Additional coverage like business interruption, debris removal, and terrorism cover can be included.
- Regular Maintenance & Safety Measures May Be Required – Insurers may mandate certain fire safety, security, and maintenance measures for coverage validity.
What is Covered & What is Not Covered?
What is Covered?
- Fire, Explosion, and Lightning
- Natural Disasters – Earthquake, flood, storm, cyclone, landslide
- Theft, Burglary & Robbery
- Impact Damage – Damage from falling objects, vehicles, or aircraft
- Accidental Physical Damage – Including electrical and mechanical breakdown of assets
- Water Damage – From leakage, burst pipes, or flooding
- Riots, Strikes, and Malicious Damage
- Subsidence & Landslides
What is Not Covered (Exclusions)?
- Gradual Wear & Tear – Depreciation, rust, corrosion, or normal aging of assets
- Intentional Damage or Wilful Negligence
- War, Terrorism, and Nuclear Risks – Unless specifically covered with an add-on
- Cyber Risks & Data Loss – Needs separate Cyber Insurance
- Pollution & Contamination – Unless caused by an insured peril
- Losses Due to Non - Compliance with Safety Regulations
Frequently Asked Questions (FAQs)
Who should buy Property All Risk (PAR) Insurance?
This policy is best suited for commercial properties, factories, warehouses, hotels, office buildings, and large residential complexes that need broader protection than fire insurance.
How is Property All Risk (PAR) different from Fire Insurance?
Fire insurance covers only named perils, whereas PAR provides all-risk coverage, meaning it covers everything except explicitly excluded risks.
Can I extend my PAR policy to cover Business Interruption?
Yes, you can add Business Interruption Cover to protect against loss of income due to operational downtime after an insured loss.
What factors affect the premium of a PAR policy?
Premiums are based on:
- Value of the insured property
- Location and risk exposure
- Fire safety measures in place
- Claims history of the insured
Does PAR Insurance cover machinery breakdown?
Basic PAR Insurance covers accidental physical damage but does not cover internal breakdown of machinery. For this, you need Machinery Breakdown Insurance as an add-on.
